CO2 Emission Reduction Potential for Passenger Cars and Light Commercial Vehicles Post 2020
Management Summary 123320 Service Project 59/12 - Study commissioned by the German Federal Ministry for Economic Affairs and Energy The German versions of the full report and the management summary are the official project deliverables and therefore the binding language version.
Institut fUr Kraftfahrzeuge Strategy and Consulting
Management Summary CO 2 Emission Reduction Potential for Passenger Cars and Light Commercial Vehicles Post 2020
Project Number 123320
Contractor: Bundesministerium fUr Wirtschaft und Energie (BMWi) Referat I C 4 Villemombler Str. 76 53123 Bonn
Project Leader:
Project Engineer: Christian Harter M. Sc.
Dipl.-lng.Dipl.-Wi
~,
g. Christian-Simon Ernst
.
DiPO Kfm. Ingo Olschewski
All rights reserved . No part of this publication may be reproduced and/or
senia Mana er Strategy and Consulting
published without the previous written consent of ika. © ika
.-Prof. Dr.-Ing. Lutz Eckstein Director
Aachen,August2014 Director: Univ.-Prof. Dr.-Ing . L. Eckstein Phone: +49241 80 25601 . Fax: +49 241 80 22147 e-mail:
[email protected] . Internet: http://www.ika.rwth-aachen .de Institut fUr Kraftfahrzeuge . RWTH Aachen University · Steinbachstrar..e 7 . 52074 Aachen
Table of Contents
3
Table of Contents 1
Key Results of the Study ............................................................................................... 4
2
Introduction and Methodological Approach .................................................................... 7
3
Environmental Analysis ................................................................................................. 8
4
Technological CO2 Reduction Potential until 2025 and 2030 ....................................... 11
5
Economical CO2 Reduction Potential until 2025 and 2030 ........................................... 15 5.1
Economic Reduction Potential for Passenger Cars ................................................ 15
5.2
Economic Reduction Potential for Light Commercial Vehicles ............................... 16
5.3
Analysis of Target Value Proposals for Passenger Cars until 2030 ........................ 17
5.4
Sensitivity of the Results ........................................................................................ 18
6
Approaches for a Revision of the EU CO2 Legislation .................................................. 20 6.1
Variation of Parameters ......................................................................................... 20
6.2
Flexibilisation Measures......................................................................................... 20
7
Recommendations for the European Legislator ........................................................... 22
8
References [Extract] .................................................................................................... 24
14CE0085
1
Key Results of the Study
1
Key Results of the Study
4
The present study analyzes the technologically realizable and economically viable CO2 reduction potential for passenger cars and light commercial vehicles by 2025 and 2030. Therefore, a scenario based analysis is performed. A range of consistent developments is projected from three scenarios (conservative, trend, progressive) and compared with currently discussed target values. The EU legislation requires that the average CO2 emission from new passenger cars (PC) in Europe have to be reduced to 95 g CO2/km towards the end of 2020 (ca. -33 % compared to 2010), while the target value for light commercial vehicles (LCV) amounts to 147 g CO2/km in 2020 (ca. -21 % compared to 2011). With regard to the further development of the CO2 legislation, the European Commission has stated an indicative target range of 68 – 78 g CO2/km for PCs in 2025 for a comprehensive impact assessment. Based on the results of a technology screening, it is shown that a reduction of the average CO2 fleet emission is enabled by the introduction of innovative technologies and the evolutionary enhancement of existing technologies also in the context of the accompanying decrease of production costs. For a reduction of complexity, the identified single technologies are combined to technology packages, which successively build upon each other and extend the relevant technological measures for each step. The technology packages are representative vehicle, respectively drive train variants for each vehicle segment which are available as technology alternatives in the future and are used in the following modelling. In a first step, the theoretical minimum CO2 fleet emission level in Europe which could be realized in a pure technical assessment is determined for each technology package, assuming its fleet wide implementation (100 % market penetration). To take account of autonomous demand driven changes of the fuel mix and the vehicle segments until 2030, a so-called market structure effect is defined. Therefore the results show, depending on the scenario, that CO2 fleet emission levels for passenger cars of 86 to minimal 77 g CO2/km in the year 2025 and 81 down to minimal 66 g CO2/km in the year 2030 would theoretically result by an overall introduction of technology packages based on combustion engines. With a fleet wide introduction of hybrid technologies, without external recharging possibilities of the regular grid, emissions could ideally be reduced to 72 to minimal 64 g CO2/km (2025) respectively 67 to minimal 54 g CO2/km (2030). Assuming a theoretic fleet wide use of Plug-In Hybrids (PHEV), emission levels of 32 to minimal 30 g CO2/km (2025) or 30 to minimal 26 g CO2/km (2030) would result within the current framework of the NEDC testing procedure. The corresponding additional production costs to achieve the minimal CO2 fleet emissions of passenger cars increase progressively while moving from conventionally based technology packages via hybrid drive trains to Plug-In Hybrids. In the case of a 100 % market penetration of the lowest available emission technology package level, the additional production costs per vehicle in the year 2025 would amount up to € 3,550 (€ 4,150) for conventional technologies, € 5,400 (€ 5,750) for hybrid technologies and up to € 8,050 (€ 8,250) for PHEV technologies.
14CE0085
1
Key Results of the Study
5
In the market of light commercial vehicles, a fleet wide implementation of conventional technology packages would theoretically lead to an emission level of 120 down to minimal 109 g CO2/km in the year 2025 and 116 down to minimal 97 g CO2/km in the year 2030. By an overall usage of hybrid technologies, emission levels of 101 to a minimum of 90 g CO2/km (2025) respectively 97 to a minimum of 78 g CO2/km (2030) would result. A complete PHEV fleet in Europe would yield an emission level of 50 down to minimal 46 g CO2/km in the year 2025 or 48 down to minimal 41 g CO2/km in the year 2030. The corresponding costs increase progressively with lower-emission technology packages, in analogy to PC. In the case of a 100 % market penetration of the particular lowest available emission technology package, the additional production costs per vehicle in the year 2025 would amount up to € 5,000 (€ 5,300) for conventional technologies, € 7,250 (€ 7,350) for hybrid technologies and up to € 9,000 (€ 8,900) for PHEV technologies. As a second step, after the derivation of the theoretical technological realizable CO2 fleet reduction potential, a scenario based analysis concerning the economic viability for PC and LCV is carried out. Therefore, the end customer’s perspective is considered. Consequently, it is assumed that additional production costs can be passed on to the end customer and that they benefit from the fuel cost savings over the assumed average period of vehicle ownership. The end customers buy the technology packages for a retail price which is assumed to be on average about 60 % higher than the production costs due to value added taxes, distribution and sales as well as guarantee costs, provisions and the profit margin of the manufacturer. Based on the modelled investment decisions of private and commercial customers it is shown which technology packages would amortize in the periods up to 2025 and 2030 for each vehicle segment. Within the trend scenario for PC, which takes a moderate increase of fuel prices into account, the expected reduction of fleet emissions to 96 g CO2/km (-32 % including the market structure effect) by 2025 is achieved on the basis of conventional technologies, which appear to be most cost effective from the customer´s perspective. By 2030 both hybrid and PHEV technology packages will become economically attractive especially in higher segment vehicles, thereby reducing fleet emissions to 79 g CO2/km (-44 % - including the market structure effect). As a consequence of the increasing hybridization and usage of PHEV in higher vehicle segments, the CO2 fleet emissions would increasingly be decoupled from the vehicle mass, thus causing a flattening of the corresponding CO2 regression line in the market. The derived theoretical technologically realizable and economically viable CO2 fleet emission levels represent objective guidelines for the further development of the CO2 regulation of PC and LCV. The results show that by 2025 fleet emissions of 96 g CO2/km would be achieved in the trend scenario. The discussed target range of 68 – 78 g CO2/km for PC in the year 2025 would result in significantly higher production costs, which could not be amortized solely by the corresponding fuels savings in an end customer perspective. A theoretical adopted target value of 68 g CO2/km by 2025 would increase the production costs per vehicle by € 3,200 – 4,100, assuming a cost optimal technology mix. Thus, a subsequent raise of vehicle retail prices would be caused, which would not fully amortize within the assumed average period of vehicle ownership. Vehicle manufacturers would need to take over the non14CE0085
1
Key Results of the Study
6
amortizing additional production cost, so that the end customer would decide for the emission reduced drive train version and the specific fleet target could be met. These remaining costs would amount to € 500 in the progressive scenario and € 3,300 in the conservative scenario. Due to the progressive character of the cost curve for innovative technologies, a linear update of the emission target value would result in high financial burdens for vehicle manufacturers. Even under the most favourable conditions within the progressive scenario merely an emission level of 78 g CO2/km would be achievable by 2025, taking the end customer’s consideration of economic efficiency into account. Regarding LCV, CO2 fleet emissions would decrease towards the level of 140 g CO2/km (-25 %) by 2025 and 135 g CO2/km by 2030 under the prevailing conditions. Within the trend scenario, this reduction of the CO2 emissions would be achieved merely by the use of conventional technology packages. To date, no explicit target value proposals for the period after 2020 have been published for LCV. With regard to an improvement of the economic CO2 emission target achievement, it is further to examine, how it can be optimized, so that ambitious CO2 fleet targets become economically viable for manufacturers and end customers. A pure forward projection of the current system would not achieve this. A flexibilisation of the objectives, considering their substance and temporal definition, would offer new possibilities for vehicle manufacturers to achieve the targets cost efficiently. Here, eco-innovations could take an emission reduction potential in real world driving into account which is not measureable in the standardized testing procedure. Another option is a banking/borrowing system, which offers the vehicle manufacturers a better innovation planning over several model cycles. Furthermore, an emission trading system, with or without an intersectoral integration, is discussed in this study, which may reduce or eliminate the disadvantages of the current CO2 regime. These disadvantages are among others the progressive increasing marginal abatement costs and the violation of the not given technology neutrality due to the mass based definition of the emission targets. The current study suggests further research considering the possible design and impact of such a system. The future task for the European Commission is to ensure a neutral to competition, socially compatible and sustainable legislation for both PC and LCV. The long-term competitive neutrality of future CO2 regulations needs also be assured when various conventional and electrified drive train concepts compete in the market. The European Commission should investigate in an impact assessment which alternatives and additions to the currently implemented CO2 legislation with specific fleet targets arise, so that the long term climate targets of the European Union are achievable in an economically reasonable way. Pure forward projections of the current system for new vehicles will foreseeable reach economic limits.
14CE0085
2
Introduction and Methodological Approach
2
Introduction and Methodological Approach
7
The European Union is committed to the goal of reducing the anthropogenic greenhouse gas (GHG) emission within the community by 80 – 95 % until the year 2050 compared to 1990. For this purpose the transportation sector is expected to contribute a considerable share. According to the EU Agenda “A Roadmap for Moving to a Competitive Low Carbon Economy in 2050” [EUR11a] and the Transport White Paper [EUR11b], the transportation sector is expected to reduce its greenhouse gas emissions by at least 60 % until 2050. The CO2 emission from road transport is responsible for about 22.4 % of the anthropogenic CO2 emission of the EU28 [EEA14a]. Regulating the CO2 emissions from new passenger cars (PC) and light commercial vehicles (LCV) is a key instrument at European level to reduce emissions from road traffic. According to the recently amended regulation (EG) No. 443/2009 the average CO2 fleet emissions for PC in Europe must be reduced to 130 g CO2/km by 2015 and 95 g CO2/km by the end of 2020. Further the CO2 emissions for new LCV must be reduced to 147 g CO2/km by 2020 according to regulation (EG) No. 510/2011. The Council and the European Parliament have given the task to the European Commission to review both regulations until the end of 2015 and to submit proposals for the amendment of acts, including the definition of realistic and achievable fleet targets for new passenger cars and light commercial vehicles for the period after 2020 [EUR14b] [EUR14c]. The Federal Ministry of Economics and Energy in Germany (BMWi) assigned the Institute for Automotive Engineering at RWTH Aachen University (Institut für Kraftfahrzeuge - ika) to perform a study on the technologically realizable and economically viable CO2 reduction potential for PC and LCV by 2025 and 2030. The methodological approach is structured as follows. The first step is a purely technological scenario based analysis, taking into account the available technologies in the mass market, their respective reduction potentials and corresponding additional production costs. In the next step, all technologies are further examined regarding their market penetration potential, based on the end customer demand. End customers of commercially used vehicles are expected mainly to decide for a technology if the higher retail price would fully amortize by the corresponding fuel cost savings. Customers of privately used vehicles are modelled in a more complex way by defining five customer groups with a different willingness to pay more than the economically reasonable price. The results regarding the CO2 fleet target values and corresponding curves derived in the present study constitute objective guidelines for the development of a CO2 regulation after 2020/2021. Furthermore, the impact of changes on key parameters regarding the CO2 fleet emissions is analyzed for German and European vehicle manufacturers. Finally, possible measures to improve both the costs and economic efficiency of CO2 regulations are considered. The results contained in the present study are expected to be included in the upcoming discussions at EU level on the development of CO2 regulations on passenger cars and light commercial vehicles.
14CE0085
3
Environmental Analysis
3
Environmental Analysis
8
The average CO2 emission of new PCs sold in Europe in 2010 (reference year for PCs) was 141 g CO2/km [EEA11] [ERN12], while new LCVs reached an average of 187 g CO2/km in their reference year 2011 [POL12] [ERN13]. When comparing these values to the massbased CO2 target value specifications for PCs and LCVs, high demands on absolute and relative reduction in CO2 fleet emission emerge. While the target value for PCs declines from 130 g CO2/km in 2015 to 95 g CO2/km by the end of 2020, the target for LCVs goes down from 175 g CO2/km in 2017 to 147 g CO2/km by 2020. With regard to the further development of the CO2 legislation, the European Commission has stated an indicative target range of 68 – 78 g CO2/km for PCs in 2025 for a comprehensive impact assessment [EUR14]. This corresponds (in absolute terms) to a linear development of the current legislative CO2 reduction path, thus representing the most challenging target values in a global comparison. In order to evaluate future target values all framework assumptions, for example regarding demand shifts between vehicle segments or drive concepts, have to be taken into account. Therefore, a scenario based continuation of the data basis from previous studies [ERN12] [ERN13] is utilized for the period up to 2030. The core results of the environmental analysis are summarized in Fig. 3-1 and Fig. 3-2. The highest volume segment in the European car market is the SEG-2 with 58 %, dominated by middle class vehicles. With a market share of 38 % SEG-1 follows, consisting of micro and small vehicles. SEG-3 (upper and luxury class) is characterized by relatively high specific CO2 emissions but represents only 4 % of all new vehicle registrations within the EU. In the context of the market structure effect, which is based on a shift in demand between segments and fuel types, an increasing proportion of micro and small cars of the SEG-1 is expected in the future at the expense of the previously dominant SEG-2. However, since further predictions show opposite trends, for example an increasing demand for SUV-type vehicles, the influence of the market structure effect will always be shown separately in the results. For LCVs most vehicle registrations relate to class III vehicles (reference mass > 1,760 kg), followed by medium sized vehicles (class II), usually based on car platforms, and small commercial vehicles (class I). For the future, a constant segment distribution is assumed for LCVs, since there are no signs of a significant demand shift. Within the scope of micro and small cars, gasoline-powered vehicles account for two-thirds of all new registrations, while diesel-powered vehicles dominate in higher segments. For LCVs the diesel engine largely dominates the market. In the context of the independent market structure effect, an increasing proportion of pure battery electric vehicles (BEV) and gaspowered vehicles (LPG & CNG) is expected especially for smaller vehicles.
14CE0085
3
Environmental Analysis
9
Fleet Distribution Status quo 2010 SEG-1 (A, B)
Prognosis [Market Structure Effect]
SEG-3 (E, F, S)
SEG-1 (A, B)
SEG-2 (C, D, M, J)
2025 SEG-3 (E, F, S)
2030
4%
3%
SEG-2 (C, D, M, J) 3% 11% 9% E 2 > E3 TP 1
E3
TP 2
TP 3
TP 4
TP 5
E2
E1
CO2-Reduction
Primary selection of technologies with high cost efficiency Stepwise expansion of the balance shell of a TP up to higher cost Consideration of the temporal availability and technological interactions, compare “House of Technologies” in full report.
CO2-Reduction
Evolutionary technologies TP1
Revolutionary technologies TP2
TP3
TP5
Conventional Technologies
Hybrid Technologies Plug-In Hybrid
Fig. 4-2:
Methodology and qualitative results of the formation of technology packages
The temporal changes of all evaluations are considered through increasing CO2 reduction potentials, due to technological progress, as well as decreasing production costs, due to learning effects and economies of scale. Particularly high learning effects are expected for hybrid technologies. The strength of the modelled learning effects and the technological progress varies within the considered scenarios. Assuming a 100 % market penetration and without considering the economic efficiency analysis of the end customer, the theoretical minimum CO2 fleet emission level is determined, as shown in Fig. 4-3. For conventional technology packages emission levels of 66 – 81 g CO2/km for PCs and 97 – 116 g CO2/km for LCVs would theoretically be achieved taking into account the market structure effect. With the use of hybrid technologies the emission of PCs would be reduced to 54 – 67 g CO2/km while emission levels of 78 – 97 g CO2/km would be achieved for LCVs. Within the framework of the NEDC a complete use of PHEVs would reduce emission levels to 26 – 30 g CO2/km for PCs and 41 – 48 g CO2/km for LCVs. The correlated additional production costs for PC (LCV) would amount up to € 4,150 (€ 5,300) for the conventional technology path, up to € 5,750 (€ 7,350) for the hybrid technologies and up to € 8,250 (€ 9,000) for the PHEV technology path.
14CE0085
4
Technological CO2 Reduction Potential until 2025 and 2030
Passenger Cars Ø Manuf . Costs [€/vehicle]
Hybrid Technology Packages Conventional Technology Packages Target End of 2020: Legend: 95 g CO 2/km Conservative Trend Progressive Conventional TP4C Hybrid (Mild, Full) 77g-86g TP2H PHEV 92g-98g
PHEV-TP
2025
TP4PHEV 30g-32g TP3PHEV 33g-35g TP2PHEV 38g-40g
8,000
6,000 4,000
TP4H 64g-72g
2,000
TP3H 70g-77g
TP3C 84g-92g
Ø Manuf . Costs [€/vehicle]
0 TP5PHEV 26g-30g TP4PHEV 28g-32g TP3PHEV 31g-35g TP2PHEV 36g-40g
8,000
6,000 4,000
TP5C 66g-81g TP4C 72g-86g
TP4H 59g-72g
TP3C 79g-92g
0 30
40
TP2C 96g-101g
TP5H 54g-67g
TP3H 65g-77g
0
Market TP1 structure 110g-115g effect
Hybrid Technology Packages Conventional Technology Packages
2,000
2030
14
50
TP2H 86g-98g
Market structure effect
TP1 106g-115g
TP2C 92g-101g
60 70 80 90 100 CO2 Fleet Emission [g CO2/km]
110
120
130
140
Light Commercial Vehicles Ø Manuf . Costs [€/vehicle]
Hybrid Technology Packages Conventional Technology Packages
PHEV-TP
2025
TP4PHEV 46g-50g TP3PHEV 51g-54g
8,000 6,000
Target 2020: 147 g CO 2/km
TP2PHEV 56g-58g
4,000
TP4H 90g-101g
TP3H 100g-109g
TP4C 109g-120g TP3C 121g-129g TP2C 135g-140g TP2H 129g-137g
2,000
TP1 153g-157g
Market structure effect
Ø Manuf . Costs [€/vehicle]
0 TP5PHEV 41g-48g
8,000
TP4PHEV 43g-50g TP3PHEV 48g-54g
6,000
TP5H 78g-97g
TP2PHEV TP4H 54g-58g 82g-101g TP3H 93g-109g
4,000 2,000
Hybrid Technology Packages Conventional Technology Packages TP5C 97g-116g TP4C 102g-120g TP3C 115g-129g Market TP2C structure 129g-140g TP1 effect TP2H 148g-157g 122g-137g
0
2030 Fig. 4-3:
0
40
50
60
70
80 90 100 110 120 130 140 150 160 170 180 190 CO2 Fleet Emission [g CO2/km]
Theoretically resulting fleet emissions for PCs and LCVs 14CE0085
5
Economical CO2 Reduction Potential until 2025 and 2030
5
Economical CO2 Reduction Potential until 2025 and 2030
15
From a technological point of view the CO2 emissions could theoretically be reduced to very challenging levels, if they were introduced in every vehicle. However, the therefore required electrification of the drive train implies high additional production costs for all vehicles. Under the assumption that vehicle manufacturers pass on additional production costs to their customers, an analysis from the end customer’s perspective is realized to identify economic viable CO2 reduction technologies. The basis for the subsequent calculations is the assumption that additional CO2 reductions result solely from the economic efficiency considerations given by supply and demand of motor vehicles. The technologically realizable and economically viable CO2 target values derived in this chapter constitute objective guidelines for the further development of the CO2 regulation in Europe after 2020/2021. The results of the economic efficiency calculations significantly depend on the development of fuel and electricity prices until 2030, the demand for mobility, as well as the assumption that a vehicle manufacturer is able to pass on the additional costs on retail price level of the technology packages to the end customer. The modelling of the market demand takes different customer types – highly technology affine individuals to homo oeconomicus – as well as their economic decision behaviour into account. The market demand of each customer group is used to calculate which technology package might be bought for each vehicle segment. Moreover, the fleet emissions at European level are calculated for the considered scenarios. 5.1
Economic Reduction Potential for Passenger Cars
Fig. 5-1 shows the resulting demand of technology packages for passenger cars in the entire European market for each segment. Within the trend scenario, the average fleet emission would decrease from 141 g CO2/km in the base year 2010 to 96 g CO2/km (about -32 %) in 2025 including the market structure effect. Thus, the target value of 95 g CO2/km set by the European Union for 2020 would be achieved approx. 5 years later without the implementation of flexibility mechanisms like eco-innovations and super credits. Although hybrid technology packages would pay back for many costumers during the amortization period, conventional technology packages prove to be economically advantageous due to their lower investment costs. A significant market diffusion of hybrid technology packages and PHEV would be expected within the trend scenario by 2030, thus reducing the average fleet emissions to 79 g CO2/km (-44 %). Considering the conservative scenario the fleet emissions would decrease merely to 112 g CO2/km by 2030. Within the progressive scenario a reduction up to 59 g CO2/km might be achieved due to the changed framework parameters. These low values in the progressive scenario would result due to higher fuel prices and lower technology costs, which increase the economic viability of PHEV technology packages for many customer groups. Vehicle manufacturers have a further CO2 reduction potential by crediting eco-innovations in the height of 7 g CO2/km.
14CE0085
5
Economical CO2 Reduction Potential until 2025 and 2030
16
Segments CO2 Emissions [g CO2/km]
PC SEG-1 (2010: 38 %) 200
- 26%
150
121 109
100
90
109
72
50
150
149
127
78 100 59 50
0
- 47%
- 32%
200
- 36%
2025
2010
2025
2030
CO2 Emissions [g CO2/km]
118
112 79
74 111
89
2025
2010
2025
2030
59 105
67
72
0
2010
66
CO2 fleet emissions [g CO2 / km] considering the market structure effect and the max. additional reduction potential of eco-innovations
96
50
76
75
Legend
-58%
141
141
129
113
0
2030
100
129
79 100 59 50
77
-32% 150
176
150
116
101
Fleet
5.2
200
0
2010
Fig. 5-1:
PC SEG-3 (2010: 4 %) -57% -36%
PC SEG-2 (2010: 58 %)
2030
52
Conservative
Trend
Progressive
Max. additional reduction through eco-innovations (7 g CO2/km)
Summary of the fleet emissions in 2025 and 2030 for passenger cars considering the market structure effect and eco-innovations Economic Reduction Potential for Light Commercial Vehicles
The results for the LCV market are summarized in Fig. 5-2. In the trend scenario, the average fleet emissions of 187 g CO2/km in the base year 2011 could be reduced to 140 g CO2/km by 2025 including the market structure effect. This corresponds to a reduction of about 25 %. Between 2025 and 2030 the CO2 fleet emissions would only decrease a further 5 g to 135 g CO2/km in the trend scenario. In the progressive scenario however, a significantly greater reduction of 39 g to 97 g CO2/km would be observed for this period. Within the context of the different scenario assumptions, the interval of possible CO2 fleet emissions for LCVs by 2030 extends from 97 g CO2/km in the progressive scenario and 159 g CO2/km in the conservative scenario. The reason for this uncertainty is the high proportion of class III LCVs in the overall market, which is about 60 %. The development of this vehicle class determines the development of the overall market significantly. Since hybrid technology packages are economically unviable for class III LCVs from an end customer perspective, the CO2 reduction is low within the trend scenario. Within the progressive scenario the use of hybrid technology packages in class III is economically viable for end customers by 2030. Therefore, a significant reduction of CO2 fleet emissions is expected in the progressive scenario between 2025 and 2030.
14CE0085
5
Economical CO2 Reduction Potential until 2025 and 2030
CO2 Emissions [g CO 2/km]
Segments
LCV Class I (2011: 11 %)
LCV Class II (2011: 31 %)
LCV Class III (2011: 58 %) -31% -28% 223
200 150 100
200
-21%
-19%
119 119 119 97 93 94
150
-20% -19% 143 143 116 112 122 114
50
50
0
0 2011
2025
2030
CO2 Emissions [g CO2/km]
200
187
2025
2030
140 136
2011
2025
2030
Legend
-28%
166
150
108
0
2011
-25%
CO2 fleet emissions [g CO2 / km] considering the market structure effect and the max. additional reduction potential of eco-innovations
159 135 97
100
159
50
133 129
152 128
0
2011
Fig. 5-2:
150
83 100
50
187 161 187 156 154
200
77 100
Fleet
5.3
17
2025
2030
90
Conservative
Trend
Progressive
Max. additional reduction through eco-innovations (7 g CO2/km)
Summary of the fleet emissions in 2025 and 2030 for light commercial vehicles considering the market structure effect and eco-innovations Analysis of Target Value Proposals for Passenger Cars until 2030
Stricter CO2 emission targets are being discussed within the EU in order to further reduce passenger car fleet emissions after 2020. However, if the new target values surpass the threshold of economic viability for end customers, high additional costs would arise for vehicle manufacturers in order to reach the goals. Advanced technology packages would be needed for the vehicles in order to achieve the target values and the correlating additional costs could not be passed on to the end customers, as shown in Fig. 5-3. The retail prices of technology packages for end customers are assumed to be about 60 % higher than the production costs due to value added taxes, distribution and sales as well as guarantee costs, provisions and the profit margin of the manufacturer. Within the trend scenario, end customers are willing to invest in innovative technology packages with an average value of € 1,600 production costs per vehicle, since they can achieve correspondingly high fuel savings during the holding period. Due to further rising fuel prices, the willingness to invest increases to an equivalent of € 2,300 production costs per vehicle by 2030. The actual investment costs for end customers would be 60 % higher in comparison to these production costs. Fig. 5-3 shows the technology costs for vehicle manufacturers in the years 2025 and 2030 within the considered scenarios for the currently discussed target values. Depending on the scenario, the production costs for the necessary technologies in order to fulfil a target value of 68 g CO2/km by 2025 would rise up to € 3,200 – 4,100 per vehicle. End
14CE0085
5
Economical CO2 Reduction Potential until 2025 and 2030
18
customers would not be willing to bear these additional costs due to their economic efficiency considerations. The remaining amount of € 500 in the progressive scenario and € 3,300 in the conservative scenario would therefore be borne by the vehicle manufacturers. Depending on the implemented CO2 emission target value a correspondingly higher or smaller financial burden is to be carried by the manufacturers. Legend Conservative
Progressive
Trend
Proposals 2025/30
150
Ø CO2 Emissions [g CO2/km]
Production costs • (1+60 %) ≙ Retail prices e.g. €PC 1,000 ≙ €RP 1,600
Target 130 g 2015
120 g 2025/Cons. Additional costs: ca. €PC 800
130 120
112 - 114 g 2030/Cons. Additional costs : 96 - 99 g 2025/Trend Additional costs: €PC 1,600 – 1,700 €PC 900 – 1,100 95
110 100 90
74 - 77 g 2025/Prog. Proposal 78 g 2025 Additional costs: ca. €PC 2,700 TP-PC-Costs: €PC 2,600 – 3,500 Proposal 68 g 2025 TP-PC-Costs: €PC 3,200 – 4,100 Proposal 60 g 2025 TP-PC-Costs: €PC 3,600 – 4,700 Proposal 50 g 2030 TP-Costs: €PC2030 3,800 – 4,900
80 70 60 0 2010
5.4
Target value or scenario result TP-costs on production level
141 g
140
Fig. 5-3:
Target values
2015
2021
2025
79 - 81 g 2030/Trend Additional costs : €PC 2,300 – 2,700 59 - 62 g 2030/Prog. Additional costs: €PC 2,800 – 3,200
2030
Market scenarios with and without market structure effect and overview of target proposals with resulting technology costs on production level Sensitivity of the Results
The entire calculation results, both the degree of the achievable CO2 fleet emissions and the recommendable linear gradient of the curve, depend essentially on whether and to what extent hybrid technologies (mild, full and plug-in hybrids) are economically viable to private and commercial customers. The economic viability is significantly influenced by central modelling assumptions, as shown by the sensitivity analysis. Therefore, there is a strong correlation to the end customers holding period. A one-year extension of this period (standard case: 4 years) increases the economic viability of hybrid technologies for several customer groups by 2025. Similar correlations exist with the retail price of the technology packages. In this context, the calculation results need to be always interpreted in the context of the modelling assumptions. The calculation results of the CO2 emissions of PHEV show similarly strong dependences. The current calculation method leads to comparatively low CO2 emissions for these drive trains, because the usage of CO2 neutral electricity is assumed. A statistical decreasing de-
14CE0085
5
Economical CO2 Reduction Potential until 2025 and 2030
19
pendency of CO2 emissions and the vehicle mass is reflected by the calculations, which eventually will lead to the definition of almost mass-independent CO2 target values. Therefore, this result is to be strictly understood as a function of the underlying CO2 emissions quantification for PHEV. Future changes in the calculation method, for example within the context of the WLTP-introduction, are not considered here.
14CE0085
6
Approaches for a Revision of the EU CO2 Legislation
6
Approaches for a Revision of the EU CO2 Legislation
20
In the context of possible approaches to revise the EU CO2 legislation, the variation of reference parameters and improvements to optimize the cost effectiveness of the goal achievement will be discussed. 6.1
Variation of Parameters
The reference parameter “mass” is established as a differentiating utility parameter for both passenger cars and light commercial vehicles in the current European CO2 legislation. The use of different utility parameters is open for a future legislation. Suitable alternatives to the currently utilized reference parameter “mass” should fulfil a number of requirements: correlation, robustness as well as data availability and objectivity. In the course of the analysis the parameters vehicle mass, footprint, displacement, power, seats, trunk or cargo-volume and the vehicle retail price were compared in terms of the criteria above. The parameter footprint turned out to be the most important alternative due to its utilization in the USA. In general, the vehicle mass shows a better correlation to the CO2 emission in comparison to the footprint for the European vehicle fleet. However, some segments, such as SUV or sport cars, are not adequately represented. The mass-based utility parameter has proven to be robust against unintended technology developments and thus remains a suitable utility parameter for European CO2 legislations. Hence, the maintenance of the vehicle mass can be recommended as a utility parameter for PCs and LCVs. Currently, there is no urgent need to change the parameter. In the future, as an increasing electrification of the drive train is predicted, especially through PHEV, the present correlation between CO2 emissions and vehicle mass could eventually lose its validity. In this possible future scenario a change of the utility parameter, for example into footprint, could make sense. 6.2
Flexibilisation Measures
The current CO2 regulation combines a manufacturer specific CO2 target value with accompanying mechanisms such as super credits and eco-innovations. Measures to expand these accompanying mechanisms would increase the cost efficiency of the CO2 legislation target achievement from the vehicle manufacturer’s point of view. Furthermore, this expansion could have a positive impact on the retail prices for end customers, compare Fig. 6-1. On the one hand this can be achieved by an objective, temporal or sektoral flexibilisation, for example through eco-innovations, banking borrowing systems or by means of an open or closed CO2 certificate trading system. These mechanisms have in common, that the overall CO2 target would be respected and not attenuated within the limits of the regulatory system. The increase in efficiency results from the fact that the scope of manufacturers increases and from the fact, that the target achievement can be optimized in terms of the considered objective, time and sector 14CE0085
6
Approaches for a Revision of the EU CO2 Legislation
21
In contrast to the above mentioned flexibilisation measures, there are rules that indirectly or directly loosen the targets for vehicle manufacturers and have the potential to reduce the necessary production costs for OEM. These rules include technology funding through CO2 bonus granting and super credits for low emission vehicles. Technology funding could refer to propulsion technologies or GHG optimized air conditionings. Depending on the amount of CO2 bonus awarded to these technologies the overall CO2 target could be slightly weakened in the focussed time frame. The systematically supported market ramp up of these technologies can lead to a cost decrease in production and therefore lead to a fastened and wider market penetration of these technologies in all vehicle segments. With this effect, it is possible to realize lower fleet emission values economically.
Measure
Impact
Attainment of the CO2 Reduction Targets
Innovation Incentives
Flexibility of target Constant for all achievement through integration of other economic sectors industries Flexibility of target Constant for PCs and Credit Trading o achievement through LCVs fleet integration with other OEM BankingTemporal flexibility of target Constant over time (+) Borrowing-System achievement Loosening of the target for (+) particularly low-CO2 Super Credits Slightly weakened (funded emission vehicles (e.g. BEV, Technologies) PHEV, FCEV) Loosening of the target for (+) Funding of Specific Slightly weakened utilization of defined (funded Technologies technologies Technologies) Expansion of technological Constant for real driving Eco-Innovations + options to achieve the conditions objectives + Increasing Incentives o Constant Incentives - Decreasing Incentives CO2 Certificate Trading
Fig. 6-1:
Measures to increase the cost efficiency of the target achievement
The potential impacts on CO2 reduction of the above described measures is often accompanied by opposite effects. Measures, which are aimed directly or indirectly to specific technologies or branches, increase innovation in the addressed areas, whereas innovation in non-funded areas may be reduced. A global valuation of the discussed measures is not possible and depends on specific needs and objectives, e.g. the cost reduction for the vehicle manufacturer, the economic optimization or the need to ensure the competitiveness of the automotive industry. An emission trading limited to the transport sector however, can be emphasized since it can decrease the target achievement costs without attenuating the overall CO2 targets or exerting direct negative effects on the innovation activities of vehicles manufacturers.
14CE0085
7
Recommendations for the European Legislator
7
Recommendations for the European Legislator
22
The Council and the European Parliament have given the task to the European Commission to review the CO2 regulation of new passenger cars and light commercial vehicles until the end of 2015 and to submit a report on their findings. This report should include suggestions for amendments as well as the possible setting of realistic and achievable target values for the period up to 2025. According to the analysis carried out in this study, a significant further reduction of CO2 fleet emissions is technically possible until the year 2030. The range of achievable future CO2 fleet targets is mainly limited by considerations of costs and economic effectiveness. To meet the target values for 2015 several economically viable technologies with favourable cost-benefit ratios are being introduced into the market by vehicle manufacturers. The EU fleet target value of 95 g CO2/km, which has to be reached by the end of the year 2020, is however, a technological and economical challenge and may only be realized economically under very favourable framework conditions, compare [ERN12] and results of chapter 5. The production costs of additional technologies, which are needed in order to reduce CO2 progressively increase with stricter CO2 targets for all vehicles segments. Therefore, more ambitious fleet target values are associated with significant increases in vehicle costs. From the end customer’s perspective, stricter fleet target values are only economical, if the higher vehicle costs are can be compensated by resulting fuel savings. Within the trend scenario, a fleet emission level of 96 – 99 g CO2/km (with / without market structure effect) could be achieved by 2025. By the year 2030, a further reduction to 78 – 79 g CO2/km may be achieved in the trend scenario. According to the findings in this study, merely in the progressive scenario the upper value – in the height of 78 g CO2/km - of the target range set by the European Commission would be viable for 2025. But this viability only applies under the favourable conditions of the progressive scenario, which is mainly influenced by a strong increase of fuel prices. A further reduction in CO2 fleet emissions implies a significant increase of the additional production costs per vehicle, which would not amortize for the average end customer. Therefore, the additional costs could not be passed on and would be an additional burden for the vehicle manufacturers. The EU Commission has the opportunity to implement various options to improve the cost and economic effectiveness of the existing regulatory framework. In order to fulfil this purpose, instruments that accelerate the introduction of lower emission vehicles into the market and increase the cost efficiency of the target achievement for vehicle manufacturers need to be mentioned (see chapter 6). Furthermore, an increased recognition of real-life emission reduction technologies should be taken into account, as these do not affect the measured emissions in the standardized driving procedure. In addition, instruments such as banking/ borrowing can significantly contribute to improve the cost efficiency of the CO2 regulation. Technically, ambitious fleet target values can only be achieved by an increased market introduction of vehicles with innovative technologies, such as electrified drive train in BEV, PHEV
14CE0085
7
Recommendations for the European Legislator
23
or FCEV. Forecasts regarding the market run-up of electric vehicles are still fraught with uncertainties. The framework has significant influence on the market introduction of electric vehicles, in particular the cost development of battery systems and the expansion of the charging infrastructure. However, vehicle manufacturers have only a limited influence on these aspects. Nevertheless, they are crucial to achieve the fleet emission target values. Therefore, the focus should be directed mainly on the market development as well as the corresponding framework. Meanwhile, supporting measures should be investigated. In analogy to the USA and with regard to the long term nature and the significant dependence on exogenous factors, such as the fuel price development, a regular re-evaluation of the target achievability should be performed in a maximum three years rhythm. The distribution of the CO2 reduction pressure between the vehicle manufacturers in the framework of the current legislation can be adjusted substantially by varying the slope of the mass-based target value curve. In the period up to 2030 a further decrease of the correlation between the vehicle mass and the specific CO2 emission is expected due to the increasing introduction of Plug-in Hybrid Vehicles, which achieve significantly lower CO2 emission values but have a higher weight due to a larger battery and additional components. In the case of an increased proportion of electric vehicles in higher segments, a flattening of the target curve would be observed on basis of the calculations performed for this study. Especially in the long term it is necessary to examine, to which extent the differentiation of model and manufacturer specific emission target values by a linear slope of a mass-based target value may still be suitable, so that equivalent burdens for vehicle manufacturers with focus on different segments can be defined. The possibility to adjust the slope of the target value curves over time according to the moving average of all fleet emissions should be discussed, in order not to implicitly influence the product portfolio and the fleet design of vehicle manufacturers politically. This would avoid a political engagement in the model policy of the vehicle manufacturers through a predefined flattened target value curve. In general and with a focus on the preservation of the innovation capability of the European automotive industry, an evenly distributed contribution between all vehicle segments to the overall CO2 reduction is of central importance. This applies especially for the premium segments and its innovation potential, which has shown to enable the development and testing of important innovations which will diffuse over model cycles into the smaller vehicle segments and will contribute there to a CO2 optimization on a large scale. With regard to an improvement of the economic CO2 emission target achievement, further examinations are needed, how and to which extent market based instruments could be added to the European CO2 regulation. It is being discussed among others to include the transport sector into the European emission trading as an alternative or in addition to the currently implemented system of CO2 fleet targets. It should be noted, that these and similar measures could have indirect effects on innovation incentives and therefore long-term technological developments. Basically, accompanying measures and framework conditions which have positive long term beneficial effects on vehicle manufacturers and suppliers should be provided.
14CE0085
8
References [Extract]
8
References [Extract]
24
[EUR11a]
EUROPEAN UNION / EUROPEAN COMMISSION A Roadmap for moving to a competitive low carbon economy in 2050 European Union, European Commission, Brussels, 2011
[EUR11b]
EUROPEAN UNION / EUROPEAN COMMISSION White Paper — Roadmap to a Single European Transport Area — Towards a competitive and resource efficient transport system European Union, European Commission, Brussels, 2011
[EUR14]
EUROPEAN UNION / EUROPEAN COMMISSION Subject: Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No. 443/2009 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars (first reading) European Union, European Commission, Brussels, 2014
[EUR14b]
EUROPEAN UNION / EUROPEAN COMMISSION Regulation (EU) No. 333/2014 of the European Parliament and of the Council of 11 March 2014 amending Regulation (EC) No. 443/2009 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars European Union, European Commission, Brussels, 2014
[EUR14c]
EUROPEAN UNION / EUROPEAN COMMISSION Regulation (EU) No. 253/2014 of the European Parliament and of the Council of 26 February 2014 amending Regulation (EU) No. 510/2011 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new light commercial vehicles European Union, European Commission, Brussels, 2014
[EEA14]
EUROPEAN ENVIRONMENT AGENCY (EEA) CO2 Monitoring from passenger cars 2010 and 2013 http://www.eea.europa.eu/data-and-maps/data/CO2-cars-emission-1 http://www.eea.europa.eu/data-and-maps/data/CO2-cars-emission-6 Accessed: 16.05.2014
[EEA14a]
EUROPEAN ENVIRONMENT AGENCY (EEA) EEA greenhouse gas - data viewer http://www.eea.europa.eu/data-and-maps/data/data-viewers/greenhouse-gases-viewer Accessed: 25.07.2014
[ERN12]
ERNST, C.-S., OLSCHEWSKI, I., ECKSTEIN, L. CO2 reduction potential for passenger cars until 2020 Study commissioned by the Federal Ministry of Economics and Technology to the Institute of Automotive Engineering (ika) of RWTH Aachen University, Aachen, 2012 http://www.bmwi.de/DE/Mediathek/publikationen,did=552398.html
[ERN13]
ERNST, C.-S., OLSCHEWSKI, I., ECKSTEIN, L., BRÖCKERHOFF, M. CO2 reduction potential for light commercial vehicles (up to 3.5 t) in Europe until 2020 Study commissioned by the Verband der Automobilindustrie e.V. to the Forschungsgesellschaft Kraftfahrwesen mbH Aachen (fka), Aachen, 2013
[POL12]
R.L. POLK Market analysis and market raw data for light commercial vehicles (LCV) in Europe for 2011 Individual evaluation R.L. Polk, Essen, 2012
14CE0085
